Smith Expert Gives Market, Risk Implications of Stalled Bipartisan Housing Bill

President Trump’s recent, abrupt decision to cancel a planned signing of the bipartisan 21st Century Road to Housing Act has injected new uncertainty into a bill aimed at expanding housing supply and easing affordability pressures. The legislation includes measures to accelerate construction, reform local zoning practices, and place new limits on large institutional investors in single‑family housing.

Clifford Rossi, professor of the practice and director of the Smith Enterprise Risk Consortium at the University of Maryland’s Robert H. Smith School of Business, said the investor‑restriction provision is unlikely to meaningfully shift affordability conditions. Large institutional investors account for roughly 3% of all single‑family rental units and about 0.5% of the total U.S. housing stock, he noted.

“Limitations on large institutional investors would have a negligible effect on moving the needle on housing affordability,” Rossi said.

He added that the broader affordability challenge remains tied to both supply constraints and borrower behavior shaped by interest‑rate dynamics. Nearly 80% of U.S. mortgage holders have rates below 6%, Rossi said, creating a strong incentive to remain in place rather than move into a market where new 30‑year fixed mortgages average around 6.5%.

“The dynamics of the U.S. housing market are multifaceted along demand and supply drivers,” he said. “While housing supply remains very tight, one reason is that many borrowers would rather sit tight on their existing home than move, given the favorable rates they obtained before 2022.”

The bill’s future remains unclear following the canceled signing, leaving policymakers and market participants waiting to see whether its provisions will advance in their current form.